can a PTO have and control its own checkbook?

talley_sue_nycFebruary 5, 2003

the treasurer of our small parochial school's board said she'd been told by the auditor that the funds raised on behalf of the school legally belong to the school. And indeed all our funds go into the accounting system controlled by the board. We (I, as organization president) authorize expenditures through the front office and the principal, so although technically the board controls the money, in practical terms they don't--they don't budget it in, they don't spend it, etc.

Long story, but the church whose building we use is currently grumpy w/ the board. And the pastor told us that if we can create a non-hypothetical bank account controlled ONLY by the PTO, that he'll transfer the running of (and profits from) the vending machines in the building to the PTO.

Can I do this? Can I just go open an account (get a 2-out-3-signatures arrangement to safeguard against embezzlement, and include the principal of the school as one of the 3 possible signatures) to use? We can leave the rest of the accounting arrangements as is.

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sheilajoyce_gw

I come from PTA background. I would think you have to register with your state franchise taxboard as a non profit educational philanthropic group. Yes, you can open your own account at a bank. If you are raising money as a PTO and not as the school, then your money is yours, and your organization will vote on how to spend it according to your bylaws. In PTA we use the signatures listed in our bylaws--president, treasurer, and one other ELECTED officer--no principal. If you have a membership drive, those dues also belong in that account. If you sell wrapping paper, for instance, those funds also belong in that account. And money is spent only according to the permission of the vote of your membership. Hope this helps.

    Bookmark   February 5, 2003 at 10:01PM
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Momma_Bird_OH

Our PTO has its own checking account. It requires 2 signatures on the checks - the treasurer and the principal. I know the organization is set up as tax exempt but don't know the specifics. We are an independnt association, not actually affiliated with either the national PTA or PTO organizations. All money collected by our association fundraising and Boxtop redemptions goes into the account.

Do any of the kids at the school have a parent who is a lawyer and could give you a little free guidance?

On a related note, our Cub Scouts pack also has its own checking account. That seems kind of similar.

    Bookmark   February 6, 2003 at 9:50AM
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whazzup

I sure don't know the complete answer to your question, but I wanted to relate an incident at my son's school years ago. Our school was closing and the children were being absorbed into other schools in the area. We had a PTO and the remaining funds were unceremoniously given to the school district to use at their discretion. Your situation is different I am sure since your school is private.

    Bookmark   February 6, 2003 at 5:00PM
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talley_sue_nyc

we also don't have, to my knowledge, a group constitution or bylaws. I think that's one reason we've been absorbed into the school's accounting system.

Igues I'd think, as someone buying wrapping paper, that my donation was going straight to the school itself; I actually kind of like that money going there. For one thing, the PTO can't actually authorize a playground-matting company to install playground surfacing on school property.

Dues or smaller fund-raising things seem like a sensible source of funds for us to control.

We're REALLY small, and not that well run, frankly, nor that strictly organized.

I suppose I could spend some energy on a constitution, right? Bleah! We get by for now, and I bet I'm the only one this bothers.

    Bookmark   February 7, 2003 at 10:51AM
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sheilajoyce_gw

Yes, PTAs can "order" playground matting as their project. Here we donate the money to the district for the purpose of playground matting after specific communication with them as to what we want. They also help us decide--they may know what the statewill allow on playgrounds or what has worn well at other school sites. They shop it around, buy and install it. It's that easy. And no PTA liability that way if someone trips on the edge and knocks out a tooth, for example. The district did the installing and verification that the material was up to codes.

    Bookmark   February 25, 2003 at 1:49PM
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talley_sue_nyc

Sheilajoyce, your PTA doesn't either officially authorize the installation of matting on school property--the district does that. That's why you put quotes around the word "order"--because the PTA doesn' t order it. The district even does all the shopping around--the PTA just picks the scope of the project. The PTA president can't call up the matting company and say, "please come install the matting in this place"--she has no authority to DO so, and the matting company will only deal w/ the school officials, and will submit its bill to the school officials.

and it may be "that easy" at YOUR school, but at my small private school, the PTA parents did the shopping around.

Currently our money goes into a specialized account in the school's books. We do have to authorize the expenditure (well, as president I do, in writing, which isn't very formal), but the school treasurer keeps saying at board meetings "the money the PTA raises belongs to the school. you use school resources to raise it, and it's raised in the name of the school, so legally it's the school's." (what she thinks we're going to use it for instead, I don't know)

    Bookmark   March 4, 2003 at 1:30PM
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sheilajoyce_gw

You are right, TallySue, here we authorize the purpose of the expenditure and the amount. We deposit the money with the district and arrange for the district to place the order and install the mat when it arrives--no liability, and it is done to code. I thought I had made that clear.

    Bookmark   March 23, 2003 at 1:53AM
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tinatark

I'm the PTO president at my DS's private school, about 200 students. We have a checking accout, which PTO officers and the school administrative staff are authorized signers. We deposit all 'PTO' funds into that account. Expenditures are done rather informally, we do have a big 'project' for the year, but for other things that come up, the Adm asks me, I usually agree (kinda hard to say no, bus repairs,etc. AND she's the school co-founder, her DH is headmaster!) then let the VP know about it also.

ptotoday.com has been an invaluable resource for me TONS of useful information there!

    Bookmark   April 11, 2003 at 9:17PM
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missy1313

I am the President of the PTO and we have a seperate account and the PTO has 100% control of our funds, the treasure and I are the only ones who can sign checks for this account. In fact the IRS says that the school and PTO cannot share the same account.I can find out for sure if you would like me to.

    Bookmark   August 18, 2006 at 8:58AM
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ninarose

Our PTO always kept the funds seperate from the school. The PTO raised the money and allocted the funds. We always got approval with what we were doing from the principal. This year the principal, who is new, has stated that she will control the account and we will need to go through her to use funds. Can she do this? What is the IRS ruling about seperate accounts for the school and the PTO?

Any help would be great.

Thanks

    Bookmark   September 1, 2006 at 8:27PM
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missy1313

The principal of my school has no control of PTO funds. When she has a request she asks the President of our PTO. The Principal is on our PTO account only for emergencies,but in 3 years she has never signed one check form the PTO account.

    Bookmark   September 6, 2006 at 4:45AM
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mariend

Being involved in PTA only, we had our own account, in fact school officials were not allowed to be on the account, per IRS regs. at that time. We worked with the school, discussed what they would like/needed etc. We put out a monthly newspaper, but rules have changed. You all need to check with either the IRS or a tax representive, as many private schools sometimes do what they want to do and later get in real trouble. They have to operate under laws we may not be familiar with.

    Bookmark   September 11, 2006 at 10:59PM
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